The Syrian government decided Tuesday to have its industrial state enterprises run on the basis of commercial viability, the official SANA news agency reported. The government "has approved a certain number of principles concerning the running of the industrial public sector," said SANA in a summary of a cabinet meeting chaired by Prime Minister Mohammad Mustafa Miro.

The agency said the government would hand public sector industrial enterprises "economic and financial independence" and "subject them to commercial law." According to SANA, the cabinet will "remove state overseeing of their operations," which means giving them administrative autonomy and limiting the role of the state to that of a shareholder.

The government has also decided to encourage the private sector to invest in industry, to create industrial zones likely to attract investment, and to "change the laws which restrict the development and export of industry," the agency continued.

The meeting also covered agriculture, which is dominated by the private sector, and the cabinet decided to take measures to "optimize the use of water, increase the amount of irrigated areas, improve the volume of and cut the costs of agricultural production."

According to economists, state companies suffer from bureaucracy and hidden unemployment, with a structure that weakens their flexibility and competitiveness, as well as laboring under a lack of liquidity.

Syria has set itself the goal of putting public sector enterprises on the road of viability, but it rules out privatizations, which are seen as a direct threat to employment. The unemployment rate is officially estimated at 9.5 percent, while private experts say it is as high as 20 percent.

State companies contribute between 35 and 50 percent of Syria's $17 billion gross domestic product. This variation depends on oil rates, oil exploitation being managed by the state, and on farming production. — (AFP, Damascus)